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Want To Prosper During These Tough Times? Eliminate These Two Things

What if I told you life was pretty simple if you want to become financially independent? Would you believe me? What if I told you by eliminating two things you could exponentially accelerate your path to financial independence? Would you be skeptical and not believe what I am saying? I know I would for sure be skeptical to listen to anyone who told me if I did two things I would be able to become financially free at a much younger age.

Well my friends, you are in luck. Time to share the secret sauce.

What’s The Secret Sauce?

Okay, before sharing the secret sauce let me make one thing clear. These things aren’t secret. I did not come up with these by myself. This has been talked about in many financial independence books and podcasts well before I started this blog or TheYoungRetireeBy33 Instagram page.

Now for the secret sauce. Figure out what your two largest expenses are in your monthly budget and ATTACK THEM! That is right. It is that simple.

Do you know what your two largest monthly expenses are? If you don’t know what those expenses are, take 30 minutes right now to figure that out. Let me give you a little help because many studies have been done about this.

For the majority of people (90%+) their two largest expenses are housing and transportation. There is a chance food expenses are higher than transportation for some, but typically largest expenses are housing and transportation.

Cool, I Know My Two Largest Expenses, Now What?

Good, have them figured out? Now determine how to eliminate or significantly reduce both of these!

How to eliminate housing expense? Ah, I thought you would never ask 🙂 house hacking is by far the single greatest thing one could do to fast track your way to financial independence. What is house hacking? I also thought you would never ask. At a high level, house hacking is renting out portions of your home (single family or multi family) while living there. To read a complete breakdown of different ways to house hack, checkout this article I wrote a few months back. Want to get a full breakdown of how to house hack from beginning to end? I have teamed up with @househackingsuccess to help get the word out about the incredible course they have put together to walk a beginner through how to house hack. If you are interested in this course, click the link here. 

How To Eliminate Transportation Or Food Costs

The next biggest expense on a monthly basis for individuals are either transportation or food costs.

Why transportation? People love lifestyle creep. The second someone gets a raise at their day job, they have already figured out a way to spend it. A lot of times this comes in purchasing a brand new car and taking on a massive monthly car payment. I have heard and talked to people my age who took on a $600 a month car payment because they felt like they had earned driving that nice new car. I usually don’t give them my two cents because I don’t want them to feel like they didn’t deserve the car. Do you really need that nice new car? You will be taking on a huge car payment and also a higher insurance bill. Don’t forget, there are many more costs to owning a car than simply the price tag.

How do I attack my transportation costs? Don’t purchase that brand new car. Drive used cars that you can pay for in cash. When you get a raise at work, invest the excess cash. Trust me, you don’t need that new car. It can wait till later down the road.

Why food? People are lazy by nature. People want to always get out and about. This typically means going out to eat more often than we should. I mean, who wants to sit at home and cook every day. Interestingly, this pandemic has made things very interesting for many individuals who would previously go out to eat all the time. I feel pretty confident hundreds of thousands of people are going to be shocked at how much money they have saved during the pandemic by not going out to eat all the time. It’s a balancing act though.

How do I attack my food costs? As humans we enjoy paying for convenience. For the purposes of food that means eating out versus cooking at home. The problem becomes the costs to eat out every meal add up quick while eating at home is much cheaper. This isn’t to say never go out and enjoy a happy hour or going out to eat with your friends every once in a while. That is not the intent of attacking food costs. The intent is to think a bit more about how much you want to go out to eat versus eating in. Simple concept but much easier said than done.

Key Takeaways:

  • Want to become financially independent at a young age? Figure out how to attack  your two largest expenses. 
  • Take time now to figure out what your two largest monthly expenses are each month. Was I right that they are more than likely housing and transportation or food? 
  • Don’t buy that new car just because you received a raise at work. Don’t go out to eat for every meal. Keep things simple. 

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Always remember @TheYoungRetireeBy33 3 Core Principles:
1 – Your money should make money for you
2 – Start early to realize the power of compound interest
3 – Eliminate your largest expense by house hacking

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Real Estate Investing Strategy – Ol’ Faithful Breakdown

Time to do a full real estate investing strategy breakdown for each of my properties. I started giving a few teasers in my Highlights on instagram, but thought giving a more detailed breakdown on my real estate investing strategy is critical. I want to provide my real world experience with actual numbers for each of my real estate investment properties. I have a variety of real estate investment strategies ranging from house hacking to long term rent by the room to short term rental properties.

Time to dive into my rental properties in the order in which they were purchased!


When I Purchased The Property

I purchased this property in August of 2019 so a little over 8 months ago. This property was going to be the first ever standalone real estate investment property I would be buying.

Was I afraid? Hell yeah I was.

Was I nervous that I was making a bad decision? Hell yeah I was.

Did I second guess myself? Hell yeah I did.

Here is the reality. It was the week of my 27th birthday and I was continuing on down a path to be financially independent through having a high savings rate and investing in the market. Nothing wrong with that. But I was comfortable. I wasn’t taking any risks. I was playing things safe and I hadn’t yet stepped up and made some big money moves in my life.

I decided there was no more time for playing it safe. It was time to take some calculated risks. It was time to start investing in my future and creating what is going to be my legacy! I woke up at 4am every morning for a full week off from work with one goal in mind. Figure out where I was going to buy my first ever short term rental property investment!

Was it easy? Absolutely not. But nothing in life that is worth pursuing is easy.

Did I do everything right? Absolutely not. But if you expect to do everything right the first go around, you are dreaming. The goal is to try to learn from others mistakes as much as you can and not make those same mistakes. There are certain things you won’t be able to account for. There are certain things you will have to learn on your own as you go through this process.

Within a week, I had 10 offers out on different properties and finalized the negotiation on Ol’ Faithful! More blog posts will come in the near future talking about how I ironed out the location I wanted to purchase in.

Strategy For Property


The strategy for Ol’ Faithful was pretty cut and dry.

Ol’ Faithful would be a dedicated short term rental property investment. This was a pivot in the business model that I did with my first house hack at The OG. To find out more about how I use The OG, read the article where I talk through my investment strategy there.

Staging the property would be focused entirely around creating a Disney theme inside the home. This was a critical piece to the puzzle and adding Disney flare throughout the home would create that much more excitement for my guests. Knowing your core customer is extremely important with the short term rental market.

Automating many of the processes people do manually is critical to creating a great and personalized guest experience. Automating sounds like it would create a less personalized guest experience, but you would be shocked at how personalized I can still make the experience feel for guests.

Ideal guests, were people tourists (or locals) coming into town who wanted to stay at an awesome home near the Disney parks and Universal!

The nightly rate ranged drastically depending on the time of the year. Like any common destination, there are high and low seasons. The goal was to get the property operating between $110-160 per night. This was an exceptional rate to be renting at for such an awesome vacation to Orlando!

Breakdown Of The Numbers

Time to break down the numbers for Ol’ Faithful!


Let’s first look at the purchase of the property.

I purchased this home for $210,000 on a conventional 20% down payment loan. Why conventional? This is one of the ways to finance a loan on an investment property. I did look to classify this home as a vacation second home, but the property wasn’t far enough away from my personal residence to qualify. This left me with a 20% down payment of $61,253.

You may look at the numbers and immediately question how the down payment was $61k when the homes price was $210k. Here is what happened with that.

I originally got the home under contract at $215,000. The appraisal came back at $200,000. There are a hundred things I could point out on the appraisal on why they were off by over $20,000. This was the beauty though. I didn’t fight the appraisal. I knew what the value of the home was based off comps in the area.

Instead of challenging the appraisal, I used the appraisal to negotiate the price of the home down even further. The crappy appraiser actually ended up saving me another $5k on the purchase price of the home.

There was a catch though. Since the appraisal came in at $200,000 that means the bank won’t loan me more than the appraised value. This then meant that I had to come to the closing table with an additional $10k at closing in cash. This would get the price of the loan to exactly what the bank would feel comfortable lending on.

Breaking Down Income And Expenses

Now time to breakdown the income and expenses for this real estate investment property.

Starting with the expenses, as most I am sure are aware, the expenses of a short term rental are much higher than long term renting. This is mainly due to paying for utilities, HOA fees, cleaning fees and pool maintenance. Those are my main expenses at the property outside of some other capital expense money I put to the side for a new AC, new water pump for the pool , etc.

Now for the income breakdown. My target occupancy rate was 80% when I first analyzed the deal. I felt like this was a very realistic number once I got up and rolling. The average nightly rate (although I don’t analyze properties on averages necessarily) is $125. The nightly rate varies drastically depending on the time of the year and the night we are talking about. I leverage softwares that are able to understand dynamic pricing and help to generate more cashflow for the future!

After all income and expenses were paid, I project to make between $600-1000 per month. Again, this isn’t a long term rental where the monthly cashflow is more or less consistent. Good months for short term rentals will look a lot different than long term rentals. This is even more reason why you have to really take advantage of the high season and set prices accordingly!

So that is a breakdown of my expected income for Ol’ Faithful! If you want to see the latest month breakdown of income and expenses detailed out for Ol’ Faithful, checkout this post!

If you aren’t already, don’t forget to follow me on Instagram!

Thanks again for all the support and continuing to come back each day for new updates in this saga!

Enjoy this article? My goal is to continue posting about my real estate investing journey and path to financial independence through investing! I want to share my journey with real numbers to people can see exactly what I am doing. Are there other ways to get to financial independence? Absolutely, this is not the only way. But this is the fun of personal finance, it is personal! Checkout more of my content here!

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Biggest Real Estate Investing Things I Learned – The OG Edition

Real estate investment properties will teach you many things. Through my journey in purchasing 4 real estate investment properties I have learned many things. For each of my real estate investment properties I am going to outline some of the key learnings I had. Every day I continue to get more knowledgeable and get just a little bit better!

Before reading this article, it is important to understand more about The OG! Below is my first post introducing The OG and talking about all the details of the property.

Time to jump into one of the first major things I learned from The OG!

Lesson #1: Understanding How Tax Assessments Work On New Builds

This is honestly something many people may not even know about when investing in real estate. When you purchase a home you will owe taxes each year on the property. The taxes vary drastically depending on where you live in the country. While I was going through to get an understanding of how much I could afford in a monthly payment, you want to ensure to add taxes to the overall cost.

Here is the major kicker and thing I learned about taxes though that kicked me in the butt after year 1! Let’s say you are buying a newly built home. When you go to purchase the home you are going to see the projected taxes from the previous years tax assessment. This is where it bites you in the ass though.

For my example with The OG, I purchased the property in August of 2016. This means the taxes I was looking at from the property was the tax assessment from 2015. Well, in 2015 the land my home was built on was just land. There was no physical structure on the land. For that reason, the tax assessment will always be less. I believe the tax assessment is less because the lands value increases when a home is built on it.

The worst part of the whole situation was the fact my real estate agent didn’t talk me through any of this. So here is what happened. I purchased the property and expected the taxes to be roughly $1,700 a year. Remember, the $1,700 a year was the tax assessment based off the lands value with no home on it. 6 months go by and I am thinking all is well and good. Then I receive something in the mail from the county appraiser’s office. The letter states my property was reassessed for 2016 and the next tax amount per year increased to $3,500. WHAT!?!?! That is going to increase my overall payment by $150 per month. Even worse, I had to pay back taxes in arrears for the previous year because my escrow account was short. So overnight my monthly payment increase by $300.

Lesson I Learned: If I buy a new build property again in the future, make sure to understand what other homes in that area pay in taxes per year. Use that as the baseline for running my numbers. Simple lesson, but an expensive one to learn.

Lesson #2: Have A Plan Before Buying

This one sounds so simple yet I cannot reiterate the point enough on how important it is. I knew when I was moving down to Florida that I didn’t want to rent anymore. This came from reading the book ‘Rich Dad Poor Dad’. At the time I felt like renting was just throwing away money and I wanted to be a homeowner.

The problem I had though was I didn’t have a plan. I knew I wanted to buy, but I didn’t even think of house hacking of any sort. I didn’t even know what house hacking was at that point in my real estate investing journey. I was lucky enough that a friend of mine kind of helped me stumble into house hacking after living there for three months.

Lesson Learned: Buying a home is all well and good, but make sure you have a plan with it. I always recommend house hacking! Always! To learn more about house hacking, checkout this article.

What I Would Have Done Differently: If I were to go back and do it all over again, I would have been prepared to house hack from Day 1 of moving in. I would have also added the fourth bedroom from day one and looked to add one additional bathroom. I think when my next guest moves out, I am going to look at adding an additional full bathroom.

Lesson #3: Don’t Just Buy Because You Think Renting Is Just Throwing Away Money

You often hear people say they want to buy a home because they feel like rent is a waste of money. The simple fact of the matter is this is not true. There are many reasons that renting is better than buying a home. There are also many reasons why owning a home can make sense for you. Renting allows you freedom and flexibility. Owning a home doesn’t.

There are a lot of additional things you have to pay for to maintain a home. Insurance, taxes, capital expenses, and HOA payments to name a few.

Be very careful to not fall into this trap if you are currently looking to purchase a home. Buying may be right for you, but make sure to understand the cost of home ownership. I highly recommend adding on 10% of your mortgage payment in unexpected expenses that will come up each month. For example, if the home you are looking to buy has a mortgage of $1,000, I would expect to pay $1,100 a month total. There is a high likelihood of the home needing $100 of unexpected expenses each month.

Lesson Learned: Buying can be extremely powerful when done right. Especially if you decide to house hack. Just because you rent doesn’t mean you are throwing money away. Renting usually allows you to live in a nicer area and allows you much more flexibility than owning a home.

Always Have Tenants Sign A Lease

Okay, I have to admit again, I was a true rookie when it came to managing my first house hack. I started with Airbnb and then transitioned to long term rentals by the bedroom in The OG. A huge mistake I made when pivoting to renting out the bedrooms long term was not having tenants sign a lease.

I mainly found people from Airbnb who then wanted to stay for months on end. I was very happy with it at the time because it was then guaranteed income. Here was where I messed up. I always just agreed with the tenants with a handshake on what the amount was going to be per month. No contract. Nothing in writing.

I know I know. Very much a rookie mistake. I learned my lesson the hard way with my first tenant when they decided to just pick up and leave after staying for 6 months. I couldn’t do anything or charge them anything because we didn’t sign any contract. I will say that is the last time I ever made that mistake again!

Lesson Learned: Whenever renting your place out long term, make sure to draft up a lease agreement. Personally, I use the base form from for Florida Residential properties. This has helped me have things in writing and make sure there are clear things in the lease that help to protect me in case something happens. Do not make the rookie mistake I made of a gentleman’s handshake!

Additional Item Learned: Florida AC systems

A little bonus item I learned the hard way in Florida about AC systems! Florida is an extremely humid state. With that comes some fun challenges with AC systems. Most AC systems have a condensation pipe that goes from the AC unit to outside the home. What I didn’t know about this was the fact that this condensation pipe is supposed to be flushed out and cleaned once a month. If you don’t clean it, it will back up into the AC unit and shut it off.

I learned this the hard way at The OG. I forgot to do this on a monthly basis to the point where the condensation line backed up twice. After spending $350 on the AC guys to come out to service the unit, I was finally not going to make that mistake again. Just an extra small tip for those out there who live in humid areas.

If you aren’t already, don’t forget to follow me on Instagram!

Thanks again for all the support and continuing to come back for new articles!

Enjoy this article? My goal is to continue posting about my real estate investing journey and path to financial independence through investing! I want to share my journey with real numbers to people can see exactly what I am doing. Are there other ways to get to financial independence? Absolutely, this is not the only way. But this is the fun of personal finance, it is personal! Checkout more of my content here!